Best Business Idea: Start an Import Export Business in India
Starting a new import export business in India is not an easy task or it can be a challenging task.
New entrepreneurs entering the world of import exports will likely have a thousand questions, ranging from the business registration, documents required, investment, the legal guidelines they must adhere to.
Unfortunately, all this information is scattered and rather scarce across different sources on the internet, making it difficult to find.
Through this step-by-step guide, SugerMint aims to guide budding new Indian entrepreneurs through the process of setting up their own import exports business.
This step-by-step guide will take you through the various task you need to do to get your import export business off the ground.
You should be ready to start your entrepreneurial journey into the world of international trade by following below steps. Best of luck!
1 Select type of Business Entity
For starting an import export business in India, one first needs to decide the form your business will take depending on the structure of ownership.
Most business owners will choose from the most common options: sole proprietorship, partnership firm, Limited Liability Partnership (LLP), C-corporation, limited partnership, Private Limited Company, S-corporation or A Public Limited Company.
Then you need to register your business and choose a name for your business entity. In India, every new business must register. Business registration is a part of the mandatory legal compliance.
2 Pan Card
It is mandatory for every registered business entity. There are some documents needed for starting a new import export business in India.
PAN Card is one of them. You must have valid address proofs and identity to register your business under the registration authority.
In order to register your new business or company, you must have a PAN CARD issued by the Income Tax Department of India.
The procedure for getting a PAN for a new business or company is quite similar to that of applying for a personal PAN. You have to get PAN CARD in the name of company.
3 Open a Business Bank account
Your new export import business will require a bank account to transact with vendors and customers. In order to carry out the business dealings, you have to open a bank account.
Preferably, it should be current account in a bank with net banking facility. The documents required to open a current account in a private sector bank or nationalized bank vary depending on the type of business entity.
4 Register your Company
To start your import-export business in India, you need to get your business registered first with the government of India, which will be responsible to look out the affairs of the import and export business.
Registering a new company in India is now a simple and easy step process. Now you can register your company from any part in India without visiting to any Government office. You do not need to visit for your company registration.
You can hire a company secretory or charter accountant for this purpose to help you with the company registration process.
- Registration on the MCA Portal
- Obtaining Digital Signature Certificate (DSC)
- Obtaining Director Identification Number (DIN)
- Prepare INC-29
- Filing INC-29
- Issue of Incorporation Certificate
You need to submit the following documents for company registration in India. You can also submit these necessary documents online through scanned copy.
- Copy of PAN Card
- Latest Bank Statement
- Passport-sized photograph
- Voter’s ID/Passport
- Telephone or Mobile Bill
- Notarized Rental Agreement in English
- Latest Electricity Bill
- No-objection Certificate from property owner
You will need to get your finances. Your business will not succeed if you do not have good initial investment.
First, you need to get your short term and long term financial projections right. No matter how well you formulate your import export business plan, your business is unlikely to get off the ground without access to some initial financing.
You must figure out which type of export financing would be best suited for your import export business. It is important that you start with an estimation of your financial requirements.
This can take the form of short-term as well as long-term investment on your business’s requirements. Additionally, there are government subsidies that you can access.
You need to figure out which type of financing option is best for you. You can take long-term or short-term loan from any private banks or government banks depending on your business requirements. In addition, you can also avail subsidies from the state or central government.
6. Obtain An Import Export Code (IEC):
IEC Code – the Import Export Code is a unique 10-digit registration code. It is mandatory to start an import export business in India or anyone looking to start international trade business.
The government of India issues the import export code (IEC). You have to apply for it online at the Director General of Foreign Trade DGFT website.
7. Selecting the Right Export Product
Decide product and as well as market. Choosing the right product for your import export business is very crucial.
There are certain factors, which a new exporter has to keep in mind such as Profitability, Trade Barriers, conditions of the international market, Demand for the Product, regulations and compliance, demand and supply, Political Environment etc.
8 Find Right Buyers
After selecting the right product, you will need to find the buyers for your product.
There are many ways to find potential buyers for your products like you can register on buyers – sellers marketplace platforms, you can generate sales leads from your website, use government bodies like Export Promotion Councils, participate in Trade Fairs and Exhibitions, etc.
9 Selecting The Right Market
Ensure that you are targeting the right market for your business. Do prior research to check that the products you are dealing are in demand in the domestic or international market.
Always keep in mind, the demand for the product, political environment, trade barriers, profitability, consumer behaviour, regulations, and so forth.
Based on these factors you may be able to choose the right market and correctly assess the viability of the products accordingly.
After you’ve completed these steps and once you have everything in place, your newly setup import export business is ready to start operational activities like exploring market opportunities, finalizing the freight forwarder/customs clearing agent, finalizing the shipping partner, and promoting your business in overseas markets.
By following, this comprehensive step-by-step guide and you should be ready to start your import export business in India!
Once you have completed everything, you can now get started. You can now explore market opportunities, finalise your shipping partner, customs clearing agents, and start promoting your business overseas.
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